Harry Theochari
Transcript
I am very pleased to announce the publication of the fourth Norton Rose Transport Survey. This year, we've had over 1,000 responses and I believe it makes our survey one of the most authoritative and hopefully one of the most eagerly awaited surveys for the transport industry.
Last year's survey showed that there was a lot of turmoil in the market and a tremendous lack of consensus from our respondents. One of the findings that intrigued me most was the fact that over 40 per cent of those that responded believed that bank finance would remain their main source of finance and yet over 40 per cent believed that their greatest challenge would be to actually find that finance and most surprisingly of all, over 40 per cent believed that the greatest threat to their business would actually be the cost of that finance.
Our current survey reveals an industry that is struggling back after being in the depths of one of the greatest financial recessions that any of us have ever faced. What is interesting, however, is that there is a great consensus among the respondents as to where the industry is going. Some of the more interesting findings are that some 60 per cent of those that responded have told us that they have had to readjust or restructure their businesses, to change the market segments in which they are working in, or they have had to change their geographical focus. Another interesting fact is that a further 16 per cent are saying they are doing exactly the same thing. Everybody is looking for new markets.
Now those that are out there looking for new funds are telling us that their main sources of funding has been structured financing and private equity. Now, that comes as no surprise to us here at Norton Rose. This reflects very much the work that we've been doing for clients over the past year or so.
Another very interesting fact is that this financial crisis may actually have made the industry greener. What we have seen from our respondents is that there has been a great drive to reduce fuel consumption in most parts of the industry, except for rail of course, where they have been looking for technical innovations in order to improve savings and efficiency.
The really good news is notwithstanding this terrible financial recession that we have all faced, 35 per cent of our clients have told us that they have either ordered or are about to order, or have taken delivery of new aircraft, of new rolling stock or of new ships. Very interestingly, it looks like their workforces are also increasing and most surprisingly, many of them are telling us that their turnover has either remained static and in many cases has improved. Africa comes out as the most positive region. ;Now that comes as no surprise to us. The reason for this is that there are so many new mining and other industrial projects, there is bound to be a great need for road, rail and other infrastructure, the need for ports and airports and shipping. The Middle East retains its confidence, but interestingly, they are looking to areas outside of their own market to continue to grow. The strong performance of the Asia Pacific remains in place, but one fact that we found particularly surprising is that the Asia-Pacific considers Europe and North America to be the market of least importance to them. The converse of that is that Europe and North America actually sees the Asia-Pacific region as the most important market for them outside of their own domestic markets. Now, not surprisingly at all, South America continues to focus very much on the North American market.
So, it seems to us that having looked at the survey as a whole, shipping, aviation and rail is seeing a degree of confidence returning to the whole transport industry. We were very interested to see that the respondents believed the three main financial centres that they would turn to to help grow and improve their business would be London, New York and Singapore and the good news for us is that by June of this year, Norton Rose Fulbright will have world-class transport teams in each of those centres.
I hope you all enjoy reading our report and I will be very pleased to discuss any of the findings with you. Please feel free to call me or any partner that you normally deal with. Thank you very much.
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